Is Caterpillar Stock Safe for Dividend Investors?

With the market seemingly in correction mode, now is a good time for dividend-seeking investors to update their watch lists for stocks to buy in the sell-off. Given that Caterpillar (NYSE: CAT) is a Dividend Aristocrat (with 27 consecutive years of annual payout hikes so far) and management recently said it anticipates another dividend bump next year, income investors may be looking at the stock. But should they like what they see?

The COVID-19 pandemic has hit Caterpillar harder than most companies, and its recovery is likely to come quite late in the cycle. The kind of outlays necessary for buying its construction, mining, infrastructure, oil and gas, and industrial machinery are, after all, usually made when customers are feeling comfortable with their end markets. 

Caterpillar is hoping the market for construction and infrastructure machinery comes back. Image source: Getty Images.

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Source Fool.com